The Dangers of Quasi-Capitalism

The vice president for policy research at the Manhattan Institute, Howard Husock, writes in National Affairs, in an article headlined, "The Dangers of Quasi-Capitalism": "business and philanthropy are essentially distinct. Confusing and confounding their goals risks undermining the efficacy of both."

That Conscious Capitalism book by Whole Foods cofounder John Mackey that I wrote about the other day takes a different approach: "In many ways, conscious nonprofits and conscious businesses are quite similar; they are based on voluntary, noncoercive exchanges; have higher purposes; serve all their stakeholders; and have conscious leadership. Conscious businesses and conscious nonprofits both create value for their stakeholders. The wall separating them needs to be taken down."

This strikes me as one of those debates that can be sorted out best by the choices of individuals. If people want to shop, work, or invest with companies that have "social missions" in addition to their profit missions, they can choose to do so. If they don't, they can choose to shop, work, or invest elsewhere. So long as it's the owners of the companies making free decisions about their priorities with a clear idea of what they are getting into and without a lot of pressure from either the government or the public, I don't think anyone needs to feel terribly threatened or alarmed. Mr. Husock is probably right that such pressure is a risk, and Mr. Mackey is probably right that for some businesses the "higher purpose" is an important motivator that doesn't detract from the business but adds to it.